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Ray Dalio: we've never seen a power being comparable to the US!

Alex From Xinjiang  July 12, 2023
https://www.youtube.com/watch?v=O6wMiDnltHQ&ab_channel=AlexFromXinjiang

In this interview, Ray Dalio, the founder of Bridgewater, talk about why China is the only power being comparable to the US in our lifetime, what is China getting right relative to the US, and what Americans don't understand about China. On top of that, he also share his insights on why India is going to benifit from US-China tensions.
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In my lifetime in our lifetimes we have never seen a power being comparable right to the United States in power.

Soviet Union but they were not economically powerful and it's very very
apparent that there's that rivalry and and conflict between them people are
so China. Ray what what are they getting right relative to us and what would you say China's getting right that most Americans don't appreciate and understand oh okay. I've been going to China for 39 years I want to start in
1984.
Soon after dang Xiao ping came to
power and I've been very lucky I they
didn't have any money I didn't go for
money I went for curiosity and then I
really got to be part of helping them to
build the system and so and so forth
um and um so since I started to go per
capita income has increased by 28 times
life expectancy's increased by 10 years
the poverty rate has gone from 88 hungry
poverty to less than one percent these
kinds of things and um and what they got
right was the reform and they did it in
a symbiotic relationship with the United
States
[Music]
um in which essentially they sold us
inexpensive good value Goods that we
preferred the prices of and they lent us
the money to do it it's a difficult
relationship
um so they and if you I studied the
dynasties going back uh over 2000 years
and what they
um they have a
oh they're intelligent they have a work
at that it's semi-confusion meaning that
they're you know orderly intelligent
hard-working people
um you know those basic elements they've
got right they had it the easy way
because they started with
uh you know when they closed the door
right from 1949 until
1978 yeah they closed the door so they
got really backwards and so that bounces
but they have a population that's more
than four times the size of the United
States so when you get to have
income let's say that's half the United
States and you have an economy that's
twice the United States so there's a
great deal of of that I I would say
um
they're they're water leads are
discipline they're hard working they can
be very creative there are different
cultures within China you know the
southern is more the business Community
whatever happened to the world and so on
um I
I think that one of the things that is
not understood is how the confusion way
of thinking affects their foreign policy
oh so
um
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Confucianism is an idea of how a family
should operate that within your family
you are controlling your family you have
the right be a big but you have these
rules
then you interact with others so it's an
extension of that they view that within
China
that that is their family they call it's
an extended family the word country in
China is too Chinese characters which is
State family okay so and and then that
also is why it's autocratic because it's
very much top down and like strict
parents operating that way
um
when they're dealing with the outside
world
um a man I think that we both know Wong
XI Chun Who's the who was just the vice
president of China and so on described
to me he he said this idea of taking
over and uh proselytizing other
countries in which you want to it just
doesn't work you know if you're going to
occupy and you're taking away their
basic rights that you know that Vietnam
doesn't work Afghanistan doesn't work
that and and he said that that was the
development of the
um Mediterranean culture and he
described that up really to the piece of
Westphalia when they had 30 Years War
and then we came up with the idea that
we would make a country and we would
make borders and that with those within
the borders would control how they did
things and those outside so when we
think of it um I think they want to be
as competitive and do as well as they
can but we you know when you ask how do
we misunderstand yes I think this idea
of fight and Conquer right is not the
same it is more of a hierarchical thing
in which those who become more powerful
are more powerful need to be more
respected and then there's a
relationship which is most almost a
vassal safe relationship those around
them and there's a way that those who
are powerful should deal with those who
are less powerful right and those who
are less powerful should deal with those
who are more followable that is a sort
of a mutual respect and that so I don't
think they're out to conquer the world
and I don't think they're out to have a
military power
so let me ask
um uh country I didn't figure in here
but another big part Russia how do you
see Russia Today in terms of the the
very patterns and attributes of of
successful countries how do you look at
Russia Today well even before even
before I it's very interesting
I took all of these indicators and I
could forecast pretty well you with them
the next year nine years growth range
if anybody wants to see them they're in
the back of the book and they're also I
update them free online so you could see
them and what Russia had
um or they basically had a cultural
problem in terms of
um
uh corruption
um
disorder fragmentation all the elements
that you say where you have equal
um education you educate your population
alcoholism as a problem in terms of
those types of things their strengths
was they didn't get much in debt but
they didn't have a creativity and all of
that technology development they had
nothing they became they're a big
resource exporter and so on so that's it
you take that away so they didn't have
the elements that I'm describing in
other words the building of the quality
education the inventiveness and all of
that problem in terms of that so that
existed before and then we have this
real screw-up to be to make this kind of
move that's right I mean it's a you know
it's a very very Bleak situation and one
might have said it when after World War
II or even up all through many of our
years that if you were to look at Russia
and you would to look at China you would
say okay well you know maybe you'd bet
on Russia into that but these cultural
issues in terms of indicators like
there's a negative 54 correlation
between corruption and the country's
next 10-year growth rates that so these
are the problems Ray if Kevin McCarthy
and and President Biden invited you into
the Oval Office right now said uh we
both read your book we see those curves
China going this way and us going that
way what can we do in the near term okay
um
first of all smart
bipartisan gym
[Music]
yeah
what's number two
but no I know what you mean without that
there's okay
you we can re-engineer things in other
words there is a certain amount of debt
how do you deal with the debt and how do
you deal with the payments on that debt
how much is going to be monetized how
much is going to be whatever it is how
do you raise productivity so that it
benefits the majority of the people
let's say the basic things like
education then civility of the
population in other words these these
Basics that we're talking about
um how do you do that
um like I basically think that if we had
a strong middle I almost don't if you
had smart bipartisan people from the
middle government
who fought for what they agreed on yes
and so on and were inventive I think
that they could deal with it I worry
about the extremes okay I worry about
the extremes the rich the poor or that
the lack of opportunity and so on yes so
um I I think smart bipartisan chip if
they said I would get together and we
will
um deal with the extremes and I think
that what you need is a
like a Manhattan Project plan in other
words take six months
and bring those people together and make
them make an agreement of how that thing
works they don't come out of that until
they have an agreement of how that thing
works I think smart people could
engineer a lot in order to make that and
I I almost don't care what they've come
up with if it's smart and they're
bipartisan and then they fight the
opposite extremes the extremes I think
we'd make a lot of progress It's both I
think there's a lot of wisdom in that um
Ray alluded to India a lot of people you
know
think India may be the the real winner
between the competition between China
and the United States what do you see
the strengths and weaknesses of India in
terms of your framework they the the
indicators give a 10-year projected
growth rate
India has the highest projected growth
rate
and the reason is there some of the
indicators are
the cost of an educated person okay
education is very important
but many places an educated person can
be very expensive right
in India they have very low costs of an
educated person okay so that means
that's power yeah okay the
um level of indebtedness
if you have a high level of indebtedness
you're going to probably have a problem
they have very low levels of
indebtedness
technology development we're seeing big
leaps forward in terms of how this
incredibly poor country that doesn't
have toilets like whatever is going to
technology development in in many ways
this invented this and so on so it has
you know if I was to go many of those
types of things within this country they
have
um wonderful education they have
wonderful family they have you know
there are more millionaires in India
than there are in the United States or
anywhere really so the ability to have
that middle class and to rise and then
we go back to the basics you know three
basics
are you earning more than your spending
as a country yeah what and it's good for
an individual too yeah okay
are you learning more than you're
spending
um are you working well together or are
you fighting with each other internally
and or you're at risk of a war
externally
if you take those criteria those basic
things your financial condition is good
you earn more than you spend so your
income statement and balance sheet are
good you're not at work with internally
so you don't have the disruption and
you're not at War externally okay you're
in a good place
what I like about yours the other thing
about it just one more point is if you
look at the history of Wars it might
have
there's the winners the losers in the
neutral countries
the neutral countries
economically and by almost all measures
that markets their Investments do better
than even the winners
and if you're a loser it's you're wiped
out Okay so we've got some questions
from the audience some uh you know since
you wrote the book uh chat GPT has come
out
um and uh we've had this greatly forward
in AI
um you know how do you think that can or
will change
um the criteria especially for China
which
um will it's got its own AI but so but
how does AI figure in now to yours well
yeah
[Music]
um
it is a tremendously powerful resource
not just in terms of giving you
information but I know somebody in terms
of computer programming nasty mountains
it says go find the mistake in the
program and then they can go into it
it's an incredibly powerful thing
so how it's used is the most important
thing
and there are no regulations right
so the problem isn't with the technology
the problem is with the people and so
when we have this war okay are we going
to use it to improve mankind or and all
are we going to use it to fight so we're
in this environment in which this
incredibly powerful force is not
regulated nor any Prospect of Regulation
and we are an environment of Conduct in
which most likely I worry that this
would be weaponized and there's not an
easy way around it because there's no
world government or anything like that
now you're exactly right with China
being behind on this yeah
um they're behind for uh two reasons
first of all the chip development is two
to four years behind on this type of
Chip
and they're worried about this because
on um in that two to four years there's
going to be a tremendous amount of
learning that they'll be behind on yes
just because of the chip development and
then it's exactly right as you say it
used to be that um when you can get all
the information because they could get
all the information all the data on
everybody on everything right and you
put AI on that wow that was a powerful
alternative plus they have eight times
as many Engineers computer engineers and
you figure wow what a competitive
advantage that really helped them on
Health Care they did a lot on facial
recognition because they didn't have
privacy regulations batteries and all
sorts of things right just amazing but
when you have this impermeable bubble
right or something just as you're
referring and you can't get information
in yes or even that whole notion and
you're two years behind in terms of the
technology it's a problem and I want to
emphasize that
if we take the next 18 months yeah to
two years
this is going to be a period of of great
disorder yeah I think
because we have in our tightening of the
financials we have the tightening yes
and not yet the consequences so you just
think of a normal business cycle just
explain that to the audience just what
we're having a tightening okay and yet
we haven't seen the consequences I think
people would be okay
there are these Cycles you know
recession growth recession stimulation
growth Prosperity gets too hot
unemployment's through low tight
monetary policy Titan stock market goes
down and then the economy goes down
right those on average have lasted seven
years give or take about three years and
since 1945 when the new system the new
order came about there's been 12 and a
half of those so we're in the sport of
the cycle right now where they have
tightened the monetary policy interest
rates they have had the costs of those
types of things and at the part of the
cycle where just credit is beginning to
fall and the consequences of that are
going to happen and that will move us
into the next 18 months okay in terms of
the normal consequences of that meaning
a worse economy more profits more
unemployment right those kinds of issues
going into elections right okay now in
elections we have a great deal of
polarity
a great deal of polarity yeah and you
put together that with this other with
and you have the wealth Gap the rich the
poor and so on
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Featuring: Ray Dalio, Thomas L. Friedman (moderator)

Bernard and Irene Schwartz Distinguished Speakers Series

• Wednesday, May 17, 2023

• Sold Out，  $35 (Members $25) | Livestream: $30 (Members $20)

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From COVID-19 to the skyrocketing cost of living and the attempted coup on January 6, 2021, the United States is experiencing some of the greatest political, social, and economic disparities it has faced in more than 100 years. As the world at large also grapples with many of these challenges, the existing world order is in a precarious state, with new leaders emerging and long-entrenched great powers facing the possibility of decline. Legendary investor Ray Dalio, in conversation with Thomas L. Friedman, discusses how turbulent economic and political periods such as our current moment are echoed in the past, and how to weather the changes these moments may produce in the future.

Ray Dalio, a global macro investor for more than 50 years and founder of Bridgewater Associates, is the author of The Changing World Order: Why Nations Succeed or Fail. Thomas L. Friedman (moderator) is a three-time Pulitzer Prize-winning journalist whose foreign affairs column in the New York Times reports on US domestic politics and foreign policy, Middle East conflicts, international economics, the environment, biodiversity, and energy.

Buy the book! Pick up a copy of the book related to this program from the NYHistory Store:
Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail
Principles: Life and Work

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